R3: The Wall

R3: REQUIRED RETAIL READING

March 11, 2010

With the earnings season nearly complete (approximately 90% of retailers have now reported), we thought we’d take a look at how the industry performance stacks up from a historical perspective. Importantly, what does this unprecedented run of inventory reduction, gross margin expansion, and earnings acceleration suggest for the back half of 2010 and the first half of 2011?

TODAY’S CALL OUT

With the earnings season nearly complete (approximately 90% of retailers have now reported), we thought we’d take a look at how the industry performance stacks up from a historical perspective. Importantly, what does this unprecedented run of inventory reduction, gross margin expansion, and earnings acceleration suggest for the back half of 2010 and the first half of 2011? The charts below speak a thousand words. The bottom line is the hurdles are high, as we are now less than two quarters away from unprecedented, peak level comparisons. We are coming off of a four quarters in a row in which the number of retailers missing earnings expectations is at historical lows.

With management teams now unanimously expressing caution over cost inflation in the back half, there is a small but growing list of factors that are likely to keep margins from moving higher. If you consider the risk embedded in missing sales due to low inventory levels vs. increasing inventories to drive incremental sales, there is yet another reason to be slightly more cautious on the likelihood of margins moving beyond peak. Of course, if sales remain robust (as we have noted in recent weeks) then difficult profit comparisons will not be as big a factor- at least for now. With that said, it’s hard to ignore the “wall” ahead that represents the lapping of the best period in modern retail profitability.

LEVINE’S LOW DOWN

In an effort to drive traffic and ultimately revenues, American Eagle Outfitters is flowing new goods every four weeks in women’s versus six weeks last year at this time. Men’s will also see an acceleration in “newness” as management looks to improve its business. Success in women’s knit tops remains a key focus as well. Management believes in improvement in this category is key to driving gross margins higher.

The Children’s Place continues to pursue growth, despite already having 950 stores in all types of real estate. Management believes there is an opportunity to open stores in smaller markets, primarily in “value” or strip centers. The company currently only operates 65 such locations and expect to focus growth in this area in the future. For 2010, the company’s square footage growth is expected to be about 5%.

Footlocker noted its enthusiasm for growth in mobile commerce at its recent analyst meeting. While the mobile platform is immaterial at this point it is interesting to note the year over year growth in the channel. In 2009, Foot Locker recorded 4 million product views on its mobile site up from only 60,000 in 2008. Management remains focused on building fully functional, mobile commerce as part of its multi-channel selling proposition.

MORNING NEWS

PUMA Acquires Cobra Golf - Puma signed an agreement to acquire 100% of the golf equipment brand Cobra Golf from Acushnet Company, the golf business of Fortune Brands, Inc. The acquisition includes the Cobra brand as well as related inventory, intellectual property and endorsement contracts and is subject to customary closing conditions and regulatory approvals. "Through the acquisition of Cobra Golf, we reinforce PUMA's commitment to our sports performance business by strengthening our growing and successful Golf category," said Jochen Zeitz, Chairman and Chief Executive of PUMA. "Cobra Golf has a history of innovative performance products fused with an edge and is therefore a perfect fit for PUMA, reinforcing our overall mission of becoming the most desirable Sportlifestyle company. With Cobra Golf, PUMA will capitalize on the many opportunities in the Golf category and upside potential ahead of us." In a separate statement, Acushnet announced plans to continue to provide services for an agreed upon period of time beyond the closing of the sale to facilitate a seamless transition. Services such as production, distribution, field sales and customer service will ensure that Acushnet Company's Cobra trade accounts and golfers continue to receive industry-leading service during this transition period. <sportsonesource.com>

Men's Wearhouse Sets 100-Plus Tux Store Closures - The Men’s Wearhouse will close more than 100 tuxedo rental stores as customers have proven that they prefer to shop in a Men’s Wearhouse store. In a conference call Wednesday following its report of a fourth-quarter loss, George Zimmer, founder and chief executive officer of the Houston-based men’s wear retailer, said: “What we’ve been experiencing since the acquisition [of After Hours] over three years ago is that customers would rather shop in a regular Men’s Wearhouse store than a Men’s Wearhouse and Tux store when given the choice.” So when the stores are located within close proximity — about a mile or less — the tuxedo rental store will close. “There are hundreds of these stores that are very close to each other and there are about 145 stores that we have right now that we think should probably close when their leases expire or before,” Zimmer said. About 35 such stores have already been shuttered, he noted, stressing that the closures are “going to strengthen our business as opposed to weaken it because we have such a high rate of recapture. Most of those customers are just going to the nearest Men’s Wearhouse store.” And when they get there, he said, it “will provide us the opportunity to sell additional product to those rental customers.” <wwd.com>

Wal-Mart Restores 300 Items After Store Visits Fall - Wal-Mart Stores Inc., the world’s largest retailer, returned about 300 items to its U.S. stores after their removal last year hurt shopper traffic. Wal-Mart restored some flavors and package sizes of food products and other consumable goods, even though they didn’t sell well when they were previously on the shelves, Bill Simon, chief operating officer of U.S. stores, said today. The items accounted for a small percentage of the merchandise varieties the retailer removed last year, he said. Narrowing the selections of products such as brown rice disappointed customers who could no longer find the size they were accustomed to buying, Simon told analysts at a conference sponsored by Bank of America in New York. As a result, some customers didn’t shop as often, he said. “What we did discontinue were things that didn’t sell well and were only bought infrequently but cost us a trip,” Simon said. “We disappointed them by taking them out, and we put them back in.” U.S. store remodelings also hurt traffic, he said. <bloomberg.com>

Rosenthal to Succeed Newsome as Hibbett's CEO - Hibbett Sports' long-time Chairman and CEO Mickey Newsome will give up the CEO's job and be replaced by the chain's Chief Operating Officer Jeffry O. Rosenthal. Newsome will become executive chairman. Both moves are effective March 15, 2010. Newsome stated, "I am pleased to announce Jeff Rosenthal has been named Chief Executive Officer of the company. I have worked closely with Jeff over the last 12 years; first in his role as vice president of merchandising and marketing, and most recently as president and COO. His extraordinary leadership and 29 years experience in the sporting goods industry have been key contributors to the success and growth of Hibbett Sports. As Executive Chairman, I look forward to working with Jeff as we continue to add value for both our shareholders and our associates." <sportsonesource.com>

Gilt's Growth Model - Gilt works because it’s creating a new model, one that is only possible online, believes Gilt chief executive officer Susan Lyne. That’s a useful lesson for any company, not only those in private sales, she said. The company in the past has projected it will do sales of $500 million in 2010. Meanwhile, it has more than 2 million members, has sold 700 brands to date and employs more than 350 people. The company puts up new stores each day, which could not happen in the brick-and-mortar world. Because quantities are limited, stock sells out fast. “That urgency and sense of competition has been a big factor in our success,” said Lyne. “It’s part shopping, but also part gaming, part entertainment.” While not all retailers can get into online private sales, they can all benefit from newness and think about appointment and event shopping, she said. In a typical week, Gilt processes 46,000 orders and speaks directly to 9,000 customers. Forty-eight percent of sales occur within the first hour of any sale. The fastest time any sale sold out was one hour and 12 minutes. About 100,000 people visit Gilt from noon to 1 p.m. each weekday. The store started with women’s ready-to-wear and quickly branched into men’s, children’s, home and travel, and it recently added art. Gilt Noir targets the top 10 percent of Gilt customers with ultraexclusive merchandise. Gilt might go into more mass-oriented sales, but not under the Gilt name, she said. <wwd.com>

EBay Ramps Up Fashion Offering - Fashion is moving into a brighter spotlight at eBay. During her forum presentation, Sandra Lin, general manager of eBay Inc.’s clothing, shoes and accessories category, outlined how the online marketplace that connects buyers and sellers is looking to offer its client base more exclusive fashions in the future. She also disclosed how the online giant identifies the different types of shoppers among the 20 million active buyers who regularly connect with some 6 million sellers on the site. Those interactions, she said, offer the company useful insights into consumer trends — from the categories being searched to the type of products and brands consumers are responding to. “We are really looking forward to leveraging the assets that we have in order to capture what we think are additional opportunities in this space and grow those opportunities,” Lin said. “To get there, we always start with the customer, trying to understand who the customer is, who the online buyer is and how is it that we can really tap into their needs.” Lin pointed to the week prior, when eBay registered 80,000 searches for Coach, 58,000 for Ralph Lauren, 18,000 for Tory Burch and 19,000 for Puma. The company can also analyze the types of items that are in demand, typically ranging from handbags to shoes and vintage clothes, but, depending on the climate, can see a rise in rain boots, for instance. <wwd.com>

Dealing with Cross Channeling - How can e-commerce help traditional brick-and-mortar stores, and vice versa? A panel — moderated by Julian Chu, general manager, online retailing for Puma North America, and consisting of Ken Weil, Camuto Group’s senior vice president, e-commerce, and Ronit Weinberg, Diane von Furstenberg’s vice president, e-commerce and online marketing — tackled the idea of cross-channeling, and how online and offline retail can complement each other and enhance the brand experience. For traditional wholesale companies, moving into direct retail through their Web sites can be an adjustment. Camuto Group manufactures shoes for labels like Tory Burch, Lucky Brand and BCBG, holds the master license for Jessica Simpson and owns the Vince Camuto brand, named for its founder. In addition to wholesaling several lines, the company retails the Jessica Simpson and Vince Camuto brands online. Weinberg cited cross-channeling and cross-technology as key challenges today, which includes “working with our off-line stores and having them embrace the technology out there to grow their customer base,” she said. <wwd.com>

IT Holding Plans More Layoffs - IT Holding SpA has reached an agreement with unions to cut about 450 jobs as part of the restructuring of the group. “It was a painful but necessary decision, and a significant step to clearly define the structure of the group in view of a sale,” said Andrea Ciccoli, one of the three state-appointed administrators. IT Holding, parent company of the Gianfranco Ferré, Malo and Exté brands and of manufacturing arm Ittierre SpA, has been in government-backed bankruptcy protection since February 2009. In October, IT Holding was granted temporary and partial state-funded support for about 220 employees. “We have moved from a temporary measure to a structural redesign of the group,” said Ciccoli. In addition to those 220 workers, who have already exited the company, another 230 will leave in the next four to eight weeks. IT Holding is eligible for the state-financed support because it employs more than 15 people and because its bankruptcy is backed by the government. Some employees could be rehired if conditions improve, but that is not often the case. <wwd.co>

Tracking the Spenders - The economy has stabilized, but we are not in expansion mode. What was down is up and what was up is down now versus in late 2008 when the economy halted after Lehman Brothers collapsed. That’s good news for women’s apparel and luxury. This is the view from MasterCard’s SpendingPulse, a controlled panel of retail activity in the U.S. that is available as a reporting service. The reports are based on credit card transactions and other data. In late 2008, people stopped buying anything that cost more than $500, said Michael McNamara, vice president of MasterCard SpendingPulse. Furniture alone contracted about 20 percent. At the end of the first quarter last year, the economy stabilized. Now sales are generally positive, and the areas that are doing best are those that were previously hard-hit. A few relevant statistics:

• Apparel sales were up 0.6 percent in January.

• Luxury goods — defined as the top 10 percent of average ticket size in a category — were up 8.1 percent in January.

CLAIMS ARE A MIXED BAG THIS MORNING

This morning's claims data is a mixed bag. While claims dropped 6k week over week to 462k from 468k, the 4-week rolling average figure actually rose by 5k to 475k from 470k. The following chart shows the rolling average trend line. Below that we show the raw data.

Interpretation of this morning's data will probably boil down to the reader's prevailing view. If they're bullish they'll see the drop week over week as a positive, and if their bearish they'll see the backup in the rolling average as confirmation. Clearly, rolling claims are well outside our 3 standard deviation channel at this point. We remain cautiously optimistic that claims will have a tailwind in the weeks and months ahead, as we expect Census hiring to begin to exert downward pressure on claims this month and lasting through May/June.

Separately, Visa reported its February numbers this morning. The company's credit volume was up 2% in February vs. 1% in January, while debit volume was up 20% vs. 19% in January. Cross border volume was up 11% in February vs. 9% in January. We read this data as neutral on the margin. Easy comps in 1Q09 should, we think, be leading to stronger upside in early 2010 prints. That said, the comps are still moving in the right direction.

Joshua Steiner, CFA

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03/11/10 08:14 AM EST

Do You Get It?

“A lie gets halfway around the world before the truth has a chance to put its pants on.”

-Winston Churchill

In hedge fund circles, a common question to ask about someone is: Does he or she get it? During my ten plus year career in the hedge fund industry, I can honestly say I evolved from someone who definitely didn’t “get it”, to someone who clearly “got it”, and finally to someone who didn’t care if they “had it”.

While this morning I am writing the Early Look, I usually have the pleasure of editing the Early Look after Keith drafts it. That’s what we stay at home defenseman do, we get up early, “put our pants on”, and block shots, or proofread as the case may be. Yesterday, I was pretty sure that the Early Look would resonate with those who “got it”. And based on the responses we received from our exclusive network, it did.

As Keith wrote yesterday, a key part of “getting it” is recognizing that people lie. CEOs lie, Prime Ministers lie, Presidents lie, Investor Relations people lie, and, yes, even the media lies. That’s it. Start with that premise when analyzing what certain people say, and you are well on the path to the enlightened place of “getting it”.

Luckily, science actually helps in some degree when trying to determine whether someone is lying. But since a person produces around 75 – 100 verbal and nonverbal cues per second and the average person is only capable of processing 7 – 10, the process of determining whether a person is lying is far from easy. We’ve reviewed literature on lying and come up with a few recommendations to help determine who is lying, which are as follows:

Establish a baseline – Ask a person the person or view the person in situations where they clearly aren’t lying. Specifically, ask questions like: what is your favorite restaurant? What was your favorite vacation? Etc. A person will have a baseline of behavior for non-lies, and when the person tells a lie their behavior, voice or body mannerisms, should change noticeably.

Behavior and body language – When someone is unduly hostile or anxious towards your question, it is likely a red flag. Lying, even for the best of liars, is an uncomfortable action that is difficult to hide. Most commonly, aggressively defending the lie and accusing the counterparty of deceiving is natural way to combat this discomfort. Certain body signals will also give away discomfort, such as: objects or body parts put in front to create a barrier, posture changes, not facing you, rubbing the forehead, and using fewer hand movements than usual.

Verbal cues – The manner in which a respondent answers a question can often be a sign of deception. The respondent may take longer to answer, may answer quickly before a question is completed, may be overly polite, and may repeat the question. The primary issue with watching verbal responses, is these can be rehearsed so the tell tale signs can be hidden easily.

Yesterday, we also highlighted another way to tell whether someone is lying. That is, compare what they do to what they say. Sounds pretty simple, and as we look around the global macro world this morning it is quite clear - some people are lying and some people are not.

The Chinese aren’t lying – Premier Wen Jiabao of China last week stated that, “latent risks in the banking and public finance sector are increasing” and that slowing loan growth would be important tool to combat this emerging issue. This morning Chinese lending for February was reported and it was down 49% sequentially and 37% year-over-year. The Chinese are saying they will tighten, and they are doing it. That’s the truth.

American officials lie – The CPI is the determinant of the income for more than 80MM people as result of statutory action: 48MM people on social security, 22MM food stamp recipients, and 4MM civil service retirements. Do you think, perhaps, the U.S. government has a small interest in understating CPI despite what they say? There may be a reason that the CPI calculation is changed every four or five years . . .to the extent that the U.S. officials are setting policy based on an inflation number that they alter to understate inflation, I would consider that a lie. But of course, maybe I just don’t get it . . .

The Greeks will continue to lie – As outlined above, a key sign that someone is lying is an undue aggressiveness towards innocent parties. According to Greek Prime Minister Papandreou, speculators are “now threatening not only Greece, but the entire global economy.” While this might be politically convenient, it is an aberration of the truth intended to remove focus from Greek fiscal policy. The fact that the policy of the Greek government has led to a debt-to-GDP ratio of north of 110% and deficit-to-GDP ratio north of 14% has, amazingly, nothing to do with speculators.

So . . . do you get it?

If not, a good way to start is to put your pants on early and catch the lies before they “get halfway around the world”.

Keep your head up and stick on the ice,

Daryl G. Jones

Managing Director

LONG ETFS

XLV – SPDR Healthcare — Healthcare was down again on 3/9/10 in the face of “Obamacare” inspired fear. While we fear we may be early here, it’s better than fearing fear itself.

UUP – PowerShares US Dollar Index Fund — We bought the USD Fund on 1/4/10 as an explicit way to represent our Q1 2010 Macro Theme that we have labeled Buck Breakout (we were bearish on the USD in ’09).

CYB - WisdomTree Dreyfus Chinese Yuan — The Yuan is a managed floating currency that trades inside a 0.5% band around the official PBOC mark versus a FX basket. Not quite pegged, not truly floating; the speculative interest in the Yuan/USD forward market has increased dramatically in recent years. We trade the ETN CYB to take exposure to this managed currency in a managed economy hoping to manage our risk as the stimulus led recovery in China dominates global trade.

TIP - iShares TIPS — The iShares etf, TIP, which is 90% invested in the inflation protected sector of the US Treasury Market currently offers a compelling yield. We believe that future inflation expectations are mispriced and that TIPS are a efficient way to own yield on an inflation protected basis.

SHORT ETFS

SPY – SPDR S&P500 — We moved to neutral (from bearish) on the S&P500 on the week of February 22. At 1139, for the immediate term TRADE, we’ll go back to bearish. This market is finally overbought. We shorted SPY on 3/5/10.

EWP – iShares Spain — The etf bounced on 3/3/10 in part from a strong day from Banco Santander, the fund’s largest holding in the Financials-heavy (43.8%) etf. We shorted Spain for a TRADE again on 3/5 as every sovereign debt risk has a time and price to be short of. We have a bearish bias on the country; massive unemployment, public and private debt leverage, and a failed housing market remain fundamental concerns.

IWM – iShares Russell 2000 — With the Russell 2000 finally overbought from an immediate term TRADE perspective on 3/1/10 and added to it on 3/2; we got the entry price that the risk manager makes a sale on strength.

GLD – SPDR Gold — We re-shorted Gold on this dead cat bounce on 2/11/10. We remain bullish on a Buck Breakout and bearish on Gold for Q1 of 2010, as a result.

IEF – iShares 7-10 Year Treasury — One of our Macro Themes for Q1 of 2010 is "Rate Run-up". Our bearish view on US Treasuries is implied.

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03/11/10 12:00 AM EST

Keith Co-Anchors Bloomberg Morning Show

DPZ – REAL TIME NOTES FROM PRESENTATION

DPZ’s comments were in line with what we heard from the company last week when it reported 4Q09 results. The company maintained its optimistic tone and reiterated that current sales are up significantly following the late 4Q09 launch of its “new and inspired” pizza. Relative to DPZ’s competitors, management made two interesting comments. First, DPZ said that the pizza category is now growing and is up 5%, but the company does not know yet how much of the growth is driven by DPZ versus its competitors. DPZ’s “significant” pickup in quarter to date sales trends most likely does not bode well for Pizza Hut from a market share perspective.

Second, DPZ stated that it will be interested to see if it is stealing share from the frozen pizza category. Management said that although the frozen pizza category is seeing growth in its average ticket, it is not experiencing growth in the number of people buying frozen pizza. With DPZ now selling pizza at lower price points than some of its frozen pizza competitors, it could take share. This is a potential negative for CPKI.

Notes from the presentation:

Pizza - Great category rooted in family tradition:

1 trillion in food industry

33 billion is pizza

DPZ-specific:

Delivery and carry out

45% of sales are international

In over 60 countries

Average check for party of four eating QSR pizza is $22.54 vs. $49.94 at FSR

“New and Inspired” Pizza product

Months of consumer trials have gone on

Very pleased with the launch of this product

Sales are up significantly but we have not quantified that as yet

#1 delivery company

Small chains and independents make up 55% of market share

DPZ 18%

Other 2 national competitors make up 27%

Great growth opportunity

20% of sales comes from online ordering

Technology is a very important part of the delivery business’ future

Margins grew last year largely due to commodities and new efficiencies

Business Units

Domestic stores

4,461 Franchised stores

466 domestic stores

Domestic Supply chain (partnership with franchisees – 50%of profits)

17 dough manufacturing facilities

One equipment and supply facility

International

4,072 Franchised stores

No Company-owned stores

6 dough manufacturing and supply chain facilities

Domestic Franchisees

Strong business partners with long term partnerships and high collection rate

Owner-operators with no outside business interests

No significant concentrations

1,200 franchisees owning 3 or 4 stores on average

Unit economics

Low cost to open/operate – 150-200k for new store

Cash on cash returns in 30-40% range

Commodities

Cheese is the most significant aspect

Cheese prices anticipated to be in 1.50-1.70 range, as per earnings call, but prices going down (only 1.27 yesterday)

Rolling over low prices from 2009 but hopefully, we will be surprised

International profits are driven by franchise royalties

91% of 2009 international operating income

International represented 34% of total DPZ operating income in ‘09

Significant international growth in 2009

Global Retail Sales CAGR of 12% from 2004 to 2009

Capital Structure

$1.5 billion of debt

6% blended cash interest rate

Interest only with 2 one-year extensions on top of 5 years -through April 2014

6-7x leveraged now. Intend to be in the 3-4x range by refinancing time.

A: Promotional market is competitive between PZZA and DPZ. 80% of all pizza sold is on deals. The consumer has always been looking for deals when they decide where to get pizza.

Small franchisees have not been as forthcoming, still tight. Well capitalized franchisees still coming forward.

Q: 80% of menu is new…what’s next? Additional product?

A: Continuing to offer promotions but want to make sure that people try the new pizza product we just rolled out.

Q: Domestic franchise growth and why it has grown over past 5 years?

A: DPZ has 1,000 stores we could open domestically…not saturated market. Harder to find growth opportunities than before. We know growth is there. Once the credit market opens up that will help. Franchisees were hurt badly in ’08 by commodities and prices had come down in ’09. So we need to make sure unit economics are right and we can attract the right franchisees.

Q: PZZA said that the pizza market had gone from 5% decline to 5% growth. Where is the share coming from?

A: Pleased to see pizza category up, we get the same data. We don’t know how much of the 5% of growth is ours vs our competitors.

Q: Growth in online business. Logistically, what are the pluses and minuses of the online stuff?

A: Now 20% of sales, and expect it to continue to grow. Corporate stores are leading the way with this with higher ROI.

Gets a menu in front of the customer. Tracking mechanism. Good website. Less labor involved. Very efficient.

Q: Frozen pizza competition?

A: Frozen is growing but most recent data shows that the ticket is growing but the number of people that is buying the pizza is not…I’ll be interested to see if we are taking share from the frozen pizza companies because some of our pizzas are priced lower than some frozen pizzas options.

Q: Shift in TV advertising. Is this the highest level? What is driving it?

A: In 2008 we moved money to coops from national advertising and that was a mistake. Went back to franchisees and they agreed on 5% for 2009 for national advertising.

Now rolling up to 5.5% (with unanimous support from franchisees)

Q: What kind of pathway do you think we can expect from new pizza? What date will you give us data on? When will business tend to trend down?

A: It can taper off within days or it can taper off within a few weeks…end of December was very strong when the “new and inspired” pizza product was launched. Promotions typically taper off, but this is not a promotion. We have completely revamped our core product and we have no history with revamping a core product to measure current performance and if can be sustained. Reported trends will come with 1Q earnings on May 4th.

Howard Penney

Managing Director

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03/10/10 02:56 PM EST

Fidgety: SP500 Levels, Refreshed...

A flat market can make any real-time risk manager fidgety because, in the end, a market won’t perpetually stay flat.

The week-to-date, and ever since we shorted the SP500 on Friday at the 1139 for that matter, has been virtually flat. Yes, we have had fits and starts of intraday strength and weakness; and, yes, the bullish side of this market continues to deserve the bullish benefit of the doubt; but on a closing price basis, it’s been basically flat. I do not expect this to continue beyond this 3-day period.

In the chart below I have outlined both levels that I think can be attained. While there is more immediate term downside here than there is upside, in the face of another horrendous consumer confidence report this morning (ABC/Washington Post report came in at down -49 versus -49 last week, despite the SP500 being up +3.1% last week) and President Obama’s approval rating hitting a new low this morning (The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 22% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-three percent (43%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -21. That matches the lowest Approval Index rating yet recorded for this President), the SP500’s pain trade remains UP (1154).

In terms of down side support, the bullish intermediate term TREND line of support is now at a higher-low of 1108 (or a -4% correction level from 1154 if this market is actually able to make up its mind and close at that higher-high).

My immediate term strategy is to not try to be a hero on the short side, but wait and watch. If I see 1154, I’ll likely short more SPY up there. If I don’t, well that will make us right on our current short position and… I guess I’ll be less fidgety.

KM

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